Oracle recently announced that their fourth-quarter results fell short of Wall Street expectations. Despite this setback, the company’s shares jumped as much as 9% in extended trading after revealing new cloud deals with Google and OpenAI.
Earnings per share came in at $1.63 adjusted, slightly lower than the $1.65 expected by LSEG consensus. Revenue for the quarter was $14.29 billion, missing the expected $14.55 billion. Oracle’s revenue increased by 3% year over year, with net income at $3.14 billion, down from $3.32 billion in the year-ago quarter.
The cloud services and license support segment generated $10.23 billion in revenue, up 9% but slightly below analyst expectations. Additionally, the cloud and on-premises licenses business contributed $1.84 billion in revenue, a 15% decrease from the previous year.
Cloud Infrastructure Growth
Cloud infrastructure revenue saw significant growth, reaching $2.0 billion, up 42% from the previous year. However, this growth rate was slower than the 49% recorded in the prior quarter. Despite this, Oracle’s cloud business continues to grow rapidly, even though it remains smaller than competitors like Amazon Web Services and Microsoft Azure.
Oracle announced that it would bring its database to Google’s cloud, with availability set for November. Additionally, OpenAI has selected Oracle’s cloud to provide additional computing capacity, moving away from its reliance on Azure. Oracle also revealed plans to introduce generative artificial intelligence features to its Fusion cloud applications for supply chain and human resources.
Despite the disappointing financial results, Oracle’s stock has gained 18% this year, outperforming the S&P 500 index. Executives are set to discuss these results and provide guidance on a conference call later today.
While Oracle may have missed Wall Street expectations in the fourth quarter, the company’s new cloud deals and overall growth trajectory indicate a promising future ahead.